- 45 -
Becker explained at trial that when he evaluates prospective
investments for clients, he focuses on the economics of the
transaction and investigates whether there is a need or market
for the product or service. With respect to the Partnership
transactions, the records indicate that Becker overlooked several
red flags regarding the economic viability and market for the
Sentinel EPE recyclers. The offering memoranda for the
Partnership transactions warned that there was no established
market for the Sentinel EPE recyclers. Becker never saw any
marketing plans for selling the pellets or leasing the recyclers.
He accepted representations by PI personnel that they would be
marketing the recyclers to clients and that there was a
sufficient base of end-users for the machines, yet he never saw
PI's client list. At the time of the closing of the
Partnerships, Becker did not know who the end-users were or
whether there were any end-users actually committed to the
transaction.
Becker purportedly checked the price of the pellets by
reading trade journals of the plastics industry. However, he did
not use those same journals to investigate the recyclers'
purported value or to see whether there were any advertisements
for comparable machines. In concluding that the Partnerships
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011